Credit crunch ''has stopped people switching mortgages''
Published: 27 May 2008
By MoneyhighStreet Staff Leave a Comment
Updated: 30 November -0001
A new report has stated that the credit crunch has reduced the number of available mortgage products and so stopped people switching to more competitive financial offers.
Website MoneyExpert.com''s Switching Index showed that consumers switched providers on a total of 32.2 million financial services in the first quarter of 2008 – down 17 per cent on the same months of 2007.
It suggested that a reduction in the number of mortgage transactions and tougher lending conditions on things like credit cards and loans explained the drop in switching activities.
"The credit crunch is having an effect on people''s ability to move as lenders increase rates and prices and withdraw products," the site founder, Sean Gardner, commented.
"The mortgage market has been the focus of concern this year as lenders have scrapped deals and made mortgage availability the big issue. With fewer deals on offer and stricter criteria it is no surprise that fewer people are moving."
Despite the general downturn in switching financial products, the study showed that the proportion of car and household insurance customers changing providers has not altered over the year.
Overall, 14 per cent of motor insurance customers and ten per cent of home insurance customers changed their cover provider during the last six months.